‘Top Spin’ Trading

Episode 28 – Why We Need To Abandon The Average and Embrace Our Edges
July 10, 2016
Episode 29 – Exploring The World Of Smart Drugs With Mansal Denton
August 8, 2016
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This week’s article is submitted by Michael Toma.  
Michael hails from New Jersey and was most recently in Montreal in June where he presented at our June Meetup session.
He is also a Certified Risk Manager, author, and trader and is our “resident risk” contributor at The Trading Edge (thetradingedge.org).


I get a bit lazy during the summer trading months. Platform charts often takes a backseat to ocean daydreams and ice cream. Thankfully, other than closing the platform a bit early on an occasional sunny Friday, my results have not suffered, at least so far.

During a recent summer narrow-range chop day, I turned to my Netflix companion and stumbled upon an amazing documentary titled, ‘Top Spin’. The doc journeys thru the preparation and qualifying process for the U.S. Olympic table tennis team. The focus was on two teen players from the same training camp who battled for a position on the team.

The filmmaker brilliantly highlighted the parents of one of the players, Ariel Tsing, as a prominent part of the film to paint the brutal landscape of the emotional training rollercoaster.

Tsing’s father, a former table tennis pro himself, took a microscopic process-based approach to ping pong mastery that immediately brought my mind back to trading. In a nutshell he describes his training methodology:

Training is based solely on the repetition of key processes. If you do something over and over again, you simply get better at it. Often you see Tsing hitting balls, one per second, relentlessly for hours at a time in machine-like fashion.

Physical as well as the psychological training was an integral part of the process. In one scene, coach Tsing went over films of footwork from a past champion and analyzed and addressed his daughter’s footwork to mimic that of the former icon.

 

My eyes lit up when he noted, ’We focus on small specific tasks: not specific goals or targets.

Goals and targets in essence are a distraction. If you focus on the process and eliminate distractions, the results will come.’

In his eyes, the process was footwork, physical stamina, preparation for pressure situations and of course, hitting thousands of ping pong balls.

Tsing’s parents principle mantra was not to talk about results; just the process and eliminate as many distractions as possible; a difficult task for a young teenager in school. Ariel rigorously trained while battling classes, friends, and traveling across the world in qualifying tournaments.

How often do we as traders focus on P&L as opposed to the execution of our plan? Imagine trading without any regards to results. Sounds crazy but this is exactly the success approach of many sports teams.

Think about it. Veteran baseball players hitting repetitive balls during batting practice. QB’s repeating that snap-only process during summer training not to mention that goofy walk thru tires thing. Why don’t they just throw 50-yard bombs to receivers on the first day?

They are focusing on minute processes in an attempt to master each. Kind of makes sense but for me it’s still strange seeing Tom Brady working on snaps.

I started to think of my own trading and how I can be more focused, improve my game and more importantly, get rid of my remaining distractions. What information do I think I need but has no relevance on my trade execution plan?

I discovered that most of the information in front of me was not required for what I am paid to do; execute my trading plan. Most of my trading platform data was to help make discretionary trades but I’m a market profile trader with little fluff needed to execute my strategies.

Given this discovery, I made a pledge for the entire month of August to only have access to the essential tools required to execute my trades. In essence, I’m dismantling my platform.

  • Oscillators – GONE
  • Larger frame stochastics – GONE
  • Crude oil and VIX chart – GONE
  • Volume bars – GONE
  • Candlestick charts – GONE! (boy this one is gonna be tough)

Will this be uncomfortable?  You bet. I’m uncomfortable just writing about it but like Tsing’s coach-father, it’s all about keeping distractions out of the picture and refining my processes. While there are so many tools and data thrown at us traders, regardless, our business is rather simple; identify opportunity, execute on them and manage risk. Results are the market’s job, not mine. To seal the deal, I’m engaging a few others to keep me honest and compliant.

Ultimately I seek to have the same historical results if not better. If there was an Olympic slot for trading, I sure would love to go to Rio. Of course, Rio has its own distractions and I certainly don’t need any more here on my charts. Wish me luck!

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‘Top Spin’ Trading

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